Singapore continues to grapple with COVID-19, with goals set in place to live with the virus as an endemic. Effects of the pandemic continue to affect our daily lives, but the property market remains largely resilient.
Unfazed by the economic uncertainties brought on COVID-19, property prices have continued to rise for the sixth consecutive quarter. Our PropertyGuru Singapore Property Market Index (PMI) Q4 2021 saw an increase of 3.88%, or 4.73 points.
Meanwhile, on the supply side, the PropertyGuru Singapore Property Supply Index (SPSI) grew by 3.59%, or 5.03 points. This is the second consecutive quarter where the number of listings on PropertyGuru rose, albeit at a much slower pace than the preceding quarter (17.6%).
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Get the Guru View: Key Findings of the PMI Q4 2021
Singapore Property Market Index Q4 2021: Property Price and Supply Analysis
Private Property Market Still Resilient, Prices Growing for the Sixth Straight Quarter
The sustained growth over the past 1.5 years is a strong signal of property sellers’ unwavering confidence in the market. The property price growth is likely to continue, but it is showing signs of slowing down, alongside decreasing transaction volumes.
In the primary market, demand remains resilient despite developers raising their prices due to challenges such as increasing construction costs, a manpower crunch, and pressures due to the Additional Buyer’s Stamp Duty introduced in 2018.
Still, the Government does not feel that the property market is overheated yet. But if trends persevere, the likelihood of cooling measures being introduced looms heavier.
Market Still Buzzing Despite Hungry Ghost Festival, Tightened COVID-19 Measures
Tightened COVID-19 safety measures during the Phase 2 (Heightened Alert) from 22 July to 9 August 2021 limited physical property viewings. Like in the previous quarter, this probably lengthened transaction periods and online property advertisements lifespans.
While transaction volumes dipped month-on-month from July through September, this was due to the strong showing in July. Year-on-year, there was growth observed for August and September, suggesting buyers are setting aside superstition for practicality.
Three out of five districts that made the list had entries in the top 10 best-selling condos in Q3 2021. This includes Pasir Ris 8 and Treasure at Tampines in District 18, OLA, The Florence Residences, and Sengkang Grand Residences in District 19, and The Watergardens at Canberra in District 27.
Although District 6 recorded the highest price decline of 12.3%, the median asking price of $3,000 psf is still considered very healthy. Similarly, Districts 7 and 11 in the CCR both have some of the highest asking prices in Singapore, and hence saw a slight downward adjustment this quarter.
The Stars: Top 10 Best-selling Condos
Affordable projects dominated the market in Q3, with nine out of 10 of the best-selling projects located in the OCR. Among them, two are also Executive Condominiums (ECs).
This is due to the good performance from launches in the past two years and the preference for larger homes due to enduring work from home arrangements. Also, mass-market condominiums in the OCR hit the sweet spot between price and size.
Pasir Ris 8 in District 18 was the most popular project, having sold 425 units. During the Hungry Ghost Festival month, Parc Greenwich (an EC) and The Watergardens at Canberra launched. Buyers paid little mind to superstitious beliefs, snapping up 60% and 65% of available units for the properties, respectively.
That said, interest in the luxury market has not waned. The CCR districts aren’t as represented on the list as most of the new projects in the city were launched earlier this year, and there are fewer units available due to exclusivity. Luxury projects such as Park Nova, 15 Holland Hill, The Avenir, and Leedon Green continued to move units at prices above $3 million, indicating vibrant movement in this segment.
Over the course of 2021, managing COVID-19 and reopening the economy have been the Government’s main priorities. Depending on our progress in managing the health crisis, next year could possibly be when the Government turns its attention to the housing market.
If the Government is to intervene, they are likely to cool the HDB resale market first as prices are growing at a much faster pace than that of the private property market. As it is, the number of million-dollar HDB flats reached a record high this year.
As Singapore works towards opening its borders and more of the population become vaccinated, more foreign buyers could return to the market. The tapering of land supply will also see less than 10 new projects in the non-landed private property market in the coming year. These combined factors may contribute to driving demand and prices up.
Additionally, property buyers might have to contend with an increased cost of borrowing. Mortgage rates have been kept depressed in the past two years, but with more economies recovering, we will likely see a rise in interest rates.
For more insights and analysis, read the full PropertyGuru Singapore Property Market Index Q4 2021 report:
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